Survey Finds Social Media Boosts Hotel Occupancy by 2x

PALO ALTO, Calif.—Hotel properties that actively engage with social media reviews grow occupancy at double the rate of properties that don’t, according to a study released by Medallia. The study examines customer and business data from more than 4,400 hotel properties worldwide to understand and quantify the impact of social media engagement on a company’s revenue growth, customer satisfaction, and social reputation.

Results Overview
The study found a direct relationship between responsiveness to social media reviews and occupancy rate. Properties that responded to more than 50 percent of social reviews grew occupancy rates by 6.4 percentage points, more than twice the rate of properties that largely ignored social media reviews. These socially engaged properties also outperformed the hospitality industry as a whole, which achieved a 4.3 percent occupancy growth rate during the same period.

“The hospitality industry has experienced the impact social media can have on their business, both positive and negative, but these findings allow properties to quantify the impact of taking action on reviews—and make it easier to justify additional investments in social media engagement,” said Aurelia Setton, Medallia’s general manager for hospitality.

Regardless of the total percentage of reviews a hotel had responded to previously, even a small increase in the proportion of reviews a hotel responded to resulted in an increase in occupancy rate. The properties that increased their responsiveness by more than 50 percent earned double the occupancy rate growth of those that didn’t improve their responsiveness:

50 percent+ increase: 6.8 percentage points of occupancy rate growth

30-50 percent increase: 3.7 percentage point growth

10-30 percent increase: 2.2 percentage point growth

1-10 percent increase: 3.2 percentage point growth

High responsiveness does not just impact occupancy rate, either. A commitment to social media engagement was found to drive similar gains in overall customer satisfaction. Properties that responded to more than 50 percent of social reviews saw their Net Promoter Scores (NPS) increase by an average of 1.4 points—while all properties with less than 50 percent responsiveness saw their scores decrease:

50 percent+ response rate: 1.4 point NPS growth

30-50 percent response rate: 0.3-point decrease

10-30 percent response rate: 1.5-point decrease

1-10 percent response rate: 1.7-point decrease

“One notable aspect of these findings is that the responses are taking place at the property level,” said Michael Morton, Best Western’s vice president of member services. “Hotels already trust their frontline with in-person customer interactions, and this research shows that letting employees engage with customers online as well—armed with their first-hand knowledge of specific customer experiences—pays real dividends.”

Additional Findings
The speed with which properties respond to customer feedback also has a significant impact on their occupancy rate. Properties that responded to feedback in less than a day on average had average occupancy rates 12.8 percent higher than properties taking longer than two days.

Responded within a day: 52.3 percent average occupancy rate

Responded in one to two days: 49.3 percent occupancy rate

Responded in more than two days: 39.5 percent occupancy rate

Hotels with the highest responsiveness to social media outperform competitors in their overall social reputation. Properties that responded to more than 50 percent of social reviews had social scores an average of five points higher than competing properties.

50 percent+ response rate: 4.9 point advantage over competitors

30-50 percent response rate: 2.7 point advantage

10-30 percent response rate: 1.2 point advantage

1-10 percent response rate: 1.2 point advantage

“Companies often use social media primarily to raise awareness about their brand, but these findings show that social engagement can also drive organizational learning and increase accountability about meeting customer needs,” said Dorian Stone, Medallia’s vice president of customer experience strategy. “Engaging thoroughly and promptly with all kinds of customer feedback shows frontline employees what they need to do to deliver better experiences—and when social media is utilized in that spirit, the gains are significant.”

12 comments

Managing online reputation is a no go without paying special attention to social networks. Not only reviews, any kind of engagement is important. Social media is where people usually act more naturally and would sometimes share some thoughts they would not tell in person to hotel staff. So, monitoring (and answering to) anything being said about your business on social media is crucial. It builds your brand’s trust and reputation and helps improve the customer service all at the same time. This research is yet another proof.

Yes that statistics is correct. Hotel industry is influenced by the online reputation and why because the industry’s success depends on visual and reality. In social media world folks resemble what they are and want the hotels in the same way and hence they are attracted by the reality. A hotel business must monitor it’s social channels and find out what folks are talking about their business and fully satisfy them if you are lacking behind in some aspects.